U.S. Virgin Islands law & politics

How to Respond to a Low Insurance Settlement Offer

Any time you find yourself in a circumstance in which you’re waiting for an insurance company to issue you a settlement offer, don’t be surprised if the first offer you get seems rather low. The claims adjuster might believe you to be partially at fault for the situation, or if you were injured, the adjuster might conclude your injuries were not serious enough to justify the damages you sought in your demand letter.

However, you shouldn’t just accept the first offer you get from the insurance agency. While it’s understandable to want to get the claims process over with as soon as possible, accepting that initial offer could result in you leaving a lot of money on the table. The adjuster does not necessarily expect you to accept the first offer, but probably hopes you will.

Here’s an overview of how you can respond to an offer you think is too low.

The counteroffer

Whenever you reject a settlement offer and prepare to make a counteroffer, you should seek the assistance of an attorney, who can advise you through the process and maximize your chances of success.

To reject the first settlement offer from the insurance company, send a letter to the adjuster in charge of your case that includes the following:

A statement that you do not accept the initial settlement

Specific reasons why you deserve a higher settlement offer than the one made to you

A demand for a higher settlement offer

The amount of your counteroffer should be a little lower than the one you submitted along with your initial demand letter. This is a signal to your insurance adjuster that you are negotiating in good faith and are willing to make a compromise. However, reducing your settlement demand by too much could, again, result in you leaving money on the table.

How to determine a fair offer

There are some circumstances in which insurance companies will make fair initial settlement offers, though it is uncommon. Therefore, you should carefully weigh every offer you receive, even initial ones, just in case you can settle the case quickly without having to go through negotiations.

In doing so, weigh the initial offer made by the insurance company against the facts you’ve compiled in your case and the total amount of damages you sustained. This will help you determine whether or not your adjuster made a fair offer. Your attorney will be an invaluable resource to you as you evaluate the fairness of any offer you receive, as he or she has likely seen countless settlement offers throughout the course of his or her career.

You should also be careful not to be too demanding. If you decline a fair offer and go to court over your demands for more money, a jury could award you an amount below that which was offered initially by the insurance company.

For more information about how to proceed if you receive what you perceive to be a low or unfair settlement offer from an insurance company, contact a skilled attorney in the U.S. Virgin Islands.

Adam N. Marinelli is an attorney in the Civil Litigation Practice Group at BoltNagi PC, a full service business law firm serving the U.S. Virgin Islands.